Tag: EU

The Long Road to Zero

Photo: monticellllo
Efficiency will be the key to decarbonizing the EU transportation sector by 2050.
By Stefanie Rossel
To achieve its Green Deal goal and make the European Union climate-neutral by 2050, the European Commission aims to decarbonize transportation in the common market by that same date. It’s a mammoth task because the transportation sector is the EU’s biggest source of greenhouse gas (GHG), currently accounting for more than 1 billion tons of carbon dioxide (CO2) emissions annually, which is equivalent to the total emissions of Germany and the Netherlands combined.
Not only is transportation responsible for more than a quarter of the EU’s total GHG emissions, but it is also the only major economic sector in Europe where GHGs have increased since the 1990s. Demand for transportation continues to grow steadily in the EU. According to the Alliance for Logistics Innovation through Collaboration in Europe (ALICE), demand for transportation in Europe increased by more than 20 percent between 2000 and 2019, with freight transportation growing 22 percent. Although the Covid-19 pandemic disrupted this trend, leading to a drop in GHG emissions from transportation of 13.5 percent between 2019 and 2020, according to the European Environment Agency, emissions quickly resumed their upward trend, growing by 2.7 percent in 2022. International transportation emissions, such as those from ships and airplanes, are also projected to continue increasing.
Complicating matters, a recent analysis by Transportation and Environment (T&E), a European advocacy group for clean transportation and energy, shows that transportation has been decarbonizing more than three times slower than the rest of the EU economy since peaking in 2007. Under current climate policies, the group says, its share could reach 44 percent of all GHG emissions in the common market by 2030, up from 29 percent today.
According to the evaluation, the EU’s current climate regulations will reduce transportation emissions by just 25 percent compared to 1990 levels in 2040 and by 62 percent in 2050 as the new CO2 standards fall short on several measures, according to the organization. For starters, T&E argues, the rules lack a 100 percent zero-emission target. Furthermore, they leave 13 percent of heavy-duty vehicle sales unregulated and define trucks running partially on diesel as “zero-emission.” Cars, vans and trucks with combustion engines bought between now and the mid-2030s, the group argues, will still be driving on European roads while shipping operators have little incentive to increase their operational efficiency. Meanwhile, demand for air travel, spurred by increasing airport capacity, will offset any gains from green fuel this decade.
More Measures Needed
T&E therefore calls for additional efforts complementing Green Deal policies to fully decarbonize transportation. Next to halting new airport and motorways capacity expansion and introducing binding electric vehicle sales targets for companies owning large fleets, the organization stresses the importance of direct electrification of road transportation, which, the group says, is two times more efficient than hydrogen power and four times more efficient than using e-fuels. Trucks are responsible for 25 percent of climate emissions from road transportation in Europe while accounting for less than 2 percent of the vehicles on the road, the group says.
A study T&E commissioned in 2022 concluded that it was possible to transition all new freight trucks to zero emission cost-effectively and in time to meet Europe’s climate targets. Long-haul trucks, the study suggested, would initially have a slower increase in uptake potential but grow quickly to 80 percent by 2026 and to 99.5 percent by 2030. Held against the reality of zero-emission truck sales in the EU, this might be wishful thinking: Of the 11,000 new zero-emission heavy-duty vehicles sold in the EU-27 in 2023, only 0.9 percent were heavy trucks and 5 percent light and medium trucks, according to the International Council on Clean Transportation. In the fourth quarter of 2023, the sales share of zero-emission vehicles (ZEVs) in the heavy truck segment exceeded 1 percent for the first time.
Reducing CO2 emissions by 50 percent will require a minimum of 465,000 ZEVs, the European Automobile Manufacturers’ Association estimates. These vehicles will need to be supported by 53,000 and 65,000 charging points as well as around 2,900 H2 fueling stations.
Increasing Logistics Efficiency
Logistics account for 11 percent to 12 percent of Europe’s total CO2 emissions, according to ALICE vice chair Sergio Barbarino. “The problem is that while most industry sectors since the 1980s or 1990s have managed to decrease their carbon footprint, transportation has been completely unbound,” he says. “Transportation has a huge struggle to decarbonize.”
While thorough electrification of vehicles or use of sustainable aviation fuels are important factors in the journey toward zero emission, ALICE prefers a more holistic approach, leveraging opportunities for increased logistics efficiency.
ALICE was set up to develop an industry-led strategy for research, innovation and market deployment of logistics and supply chain management, and to provide an overarching view on logistics and supply chain planning and control.
The not-for-profit association has more than 180 members and represents all logistics key stakeholders as well as retail companies, information and communication technology providers and research and technology centers. ALICE supports, assists and advises the European Commission in the implementation of the EU Programs for research, Horizon 2020 and Horizon Europe.
The alliance’s defining rationale is the Physical Internet (PI), an open-method approach that maximizes the use of existing data in infrastructure. The PI involves sharing resources with business partners, for instance, transportation means or storing space, which reduces costs, increases efficiency and contributes directly to reducing traffic and therefore emissions. The PI aims to seamlessly connect organizations by means of an overarching network system to external sources and capabilities so that they can collaborate and share transportation routes as well as logistics nodes, such as distribution centers, inland terminals or airports and ports.
For the future, ALICE has identified several pillars. The first deals with how freight demand growth is managed, focusing on the question of how much stuff really needs to be moved and whether it would be more efficient to manufacture closer to the point of consumption.
The second pillar stresses that all modes of transportation should be used as efficiently as possible. “Our problem today is that traditionally shaped supply chains are highly individual and diverse,” Barbarino said. “This lack of standardization makes the supply chain inefficient.” Choosing the most efficient energy mix between diesel-powered trucks with 100 g GHG per ton-kilometer, ZEVs (which still emit around 80 g GHG per ton-kilometer), trains (25 g GHG per ton-kilometer) or ships (10 g GHG per ton-kilometer) can make a huge difference.
Pillar No. 3 calls for managing fleets and assets as efficiently as possible. In Europe, a truck is on average used with 50 percent of capacity. “As long as you only ship single-type products, you can never fill a truck efficiently. To achieve this, you will need combined products of different companies.”
If enhanced efficiency is achieved in pillars one through three, Barbarino emphasized, this would lead to a 50 percent to 60 percent reduction in emissions. In addition, ALICE expects a $100 million to $300 million cost relief for the European industry.
Removing Regulatory Barriers
Several EU directives currently in preparation are expected to significantly facilitate the realization of more sustainable transportation solutions, according to Barbarino. The revised Weights and Dimension Directive will remove barriers for the uptake of ZEVs and energy-saving technologies and harmonize the rules on maximum weight and dimension of heavy-duty vehicles in cross-border operations. Among other things, it will allow for the extra weight of the batteries for ZEVs, enable a European modular system between member states with trucks heavier than 40 tons and will streamline procedures and requirements for indivisible loads.
The new Combined Transportation Directive will support the shift from road freight to lower emission transportation modes such as inland waterways, maritime transportation and rail. It will entail the obligation on terminals to publish information about available services and facilities.
Apart from policies, automation could be a revolution for freight transportation, Barbarino pointed out, and also for sustainability. He reported about an experiment in which companies had tried out “silent delivery,” i.e., delivery before six a.m. and thus outside the usual morning rush hour. This way, the companies could save 30 percent of fuel.
“To decarbonize transportation, it is important to push the boundaries of technology and regulation,” Barbarino concluded. “Often, the most complex part of a project is not the technology or the innovation but the permitting.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

October 1, 2024
Rewriting the Rules

Will the next EU Tobacco Products Directive embrace harm reduction?
By Stefanie Rossel
Things may take a bit longer in Brussels. The European Commission (EC) started preparations in 2021 to revise its Tobacco Products Directive (TPD), but the process remains in its evaluation phase, with an impact assessment expected in 2025.
The commission’s draft proposal is anticipated in late 2025. By 2027 or 2028, member states are expected to implement the new legislation. Shaping the new policy will be the job of the next commission. In June 2024, the common market elected a new European Parliament for the next five years.
The TPD currently under evaluation was issued in 2014. While already covering vape and heated-tobacco products in addition to traditional cigarettes, it does not include products that emerged after the legislation was adopted, such as nicotine pouches. How these and other novel nicotine products will be regulated in TPD3 remains the subject of speculation.
“We know only that the evaluation phase should have long been concluded,” says Jan Muecke, managing director of the German Association of the Tobacco Industry and New Products. One reason for the delay, he suggests, could be the EU ombudsman’s investigation of the commissioning of the European Network for Smoking and Tobacco Prevention (ENSP), which advises the EU Commission in the evaluation process. As a network of anti-tobacco nongovernmental organizations, the ENSP can’t be objective, according to Muecke.
Muecke expects the new commission, which will take up its official duties this autumn, to close the evaluation and push for far-reaching changes to the directive. The question, he says, is whether these changes will include a recognition of tobacco harm reduction (THR). While proponents claim novel nicotine products are significantly less harmful than combustible cigarettes and should therefore be treated differently, the EU, which has ratified the World Health Organization Framework Convention on Tobacco Control, insists that “less harmful” means “still harmful” and worries about yet-unknown long-term health effects and the protection of youth.

Jan Muecke | Photo: German Association of the Tobacco Industry and Novel Products
Missing Its Target
However, critics contend that continuing the existing approach or adopting an even more hostile stance toward novel nicotine products may prevent the EU from achieving its goal of a “‘tobacco-free generation” (defined as a smoking prevalence of less than 5 percent) by 2040.
According to the most recent Eurobarometer survey, the EU smoking rate decreased by only 1 percent between 2020 and 2023. At 24 percent, nearly a quarter of EU adults still smoke cigarettes. Since the TPD took force in 2016, EU smoking prevalence has fallen 3 percent. At this pace, the advocacy group Clearing the Air calculated, the EU will reach its tobacco-free goal 70 years after the target date.
“So far, EU tobacco policy has been focusing on paternalism against consumers, manufacturers and retailers,” says Muecke. “As this approach has not led to any relevant results, a real strategy change is needed. Instead of plain packaging and high taxes, politics should actively promote smokers’ switching to less hazardous products such as vapes, THPs [tobacco-heating products] or pouches. By having chosen such an approach, Sweden will soon have reached the status of a smoke-free nation. For such a reorientation of politics, however, a lot of persuasive efforts in Brussels will be required. But recently, there were very few signals from the EC that it might dare turn away from its regulatory approach of ‘quit or die.’ The civil servants in Brussels still consider e-cigarettes and the likes as a problem and not as part of the solution.”
“The big takeaway point from Eurobarometer is that there isn’t a hope of the EU achieving its smoke-free or tobacco-free targets, particularly when they continue to demonize safer nicotine products, which actually help people quit smoking,” echoes Damian Sweeney, a partner in the European Tobacco Harm Reduction Advocates (ETHRA), a consumer advocacy group. “It’s important to keep in mind that policymakers may not be aware of the detail in reports like Eurobarometer and certainly not success stories like Sweden and the U.K. This is why advocacy is so vital to educate policymakers and make them aware of what can and does work in reducing the burden on health from smoking.”
Nevertheless, Sweeney is cautiously optimistic about TPD3 as there seems to be a growing number of Members of Parliament (MEPs) that understand the concept of tobacco harm reduction. In a February 2022 report, for example, the European Parliament’s Special Committee on Beating Cancer (BECA) acknowledged the concept of harm reduction.
“Of course, the BECA report and the more recent report from the subcommittee on noncommunicable diseases, which adopted the same language as BECA in relation to safer nicotine products, is a positive in that respect,” says Sweeney. “Both reports are useful tools that advocates can utilize when speaking to MEPs about the role of SNPs in reducing smoking. It is important to note that we do not see these positive signs replicated in the European Commission.”
At this pace, the advocacy group Clearing the Air calculated, the EU will reach its tobacco-free goal 70 years after the target date.
More Stringent Rules Anticipated
If common sense does not prevail, the EC’s draft proposal will likely contain considerably stricter regulations for all product categories, according to Muecke. “Brussels could try to introduce standardized rules that completely ignore product-specific characteristics,” he says. “The regulation of nicotine products according to their harm potential, as it was partly introduced for e-cigarettes in the current TPD, is also likely to be put to the test. Furthermore, the EC will try to anticipate the development of new products in their regulations. Tobacco-free nicotine pouches don’t fall into the scope of the TPD, which is why many member states in recent years felt obliged to pass their own regulations. The EC will try to prevent such a development for future innovations. This is something we must pay particular attention to because innovation should always be possible.”
With vape flavors increasingly under scrutiny, Sweeney thinks it’s possible that the commission will propose a flavor ban. “This is where advocacy and building relationships with members of the European Parliament will be key, as proposals will have to be debated and voted on in committee and in the European Parliament as a whole,” he says.
In June, EU health ministers discussed proposals by Latvia and Denmark to restrict flavors in vapes and nicotine pouches. The current TPD allows member states to set their own rules for flavors. Denmark, Estonia, Finland, Hungary, Lithuania, the Netherlands and Slovenia already ban vape flavors. Spain recently completed a public consultation on the topic; Latvia reportedly is in the process of introducing flavor restrictions.
“It’s very concerning that member states would attempt to pressurize the commission to bypass the ongoing review of the TPD, but I don’t expect to see any actions at an EU level before the TPD,” says Sweeney. “Ahead of the June meeting, ETHRA wrote to all EU health ministers to highlight the serious unintended consequences of banning flavors: increase in smoking through reduced adult switching and increased relapse from vaping to smoking, a growing black market for flavored products, and potentially dangerous consumer workarounds, such as DIY [do-it-yourself] mixing, which can carry some risks.”

“Tobacco harm reduction shouldn’t be a right/left issue—it’s a people issue.”
Damian Sweeney, partner in the European Tobacco Harm Reduction Advocates
Pouches in Peril
According to a commission spokesperson, snus will be part of the directive’s evaluation, but neither Muecke nor Sweeney expect the EU to legalize the product, which has been banned throughout the EU, except in Sweden, since 1992. “Sweden is on the verge of becoming smoke-free, 16 years ahead of the EU’s target, and snus has played a key role in that,” says Sweeney. “This success story could be emulated across the EU if the ban on snus was lifted; unfortunately, I can’t see that happening, and there’s a possibility the ban could be extended to nicotine pouches.”
Prohibiting the latter would be difficult, however, according to Muecke, as nicotine pouches are already available in 16 member states.
Despite increasing calls to ban disposable vapes, Sweeney expects single-use e-cigarettes to remain legal in the next TPD. However, the products are likely to disappear from the market anyway due to the EU Battery Directive, which will ban single-use batteries. “Manufacturers are already adapting and moving toward disposable-style devices that are rechargeable.”
Whether the recent EU election, in which the center-right European People’s Party (EPP) gained seats, will impact TPD3 remains to be seen. “As far as tobacco harm reduction and the availability of safer nicotine products is concerned, this is a positive move as the EPP have been supportive of THR,” says Sweeney. “But I think it’s important to remember that THR isn’t and shouldn’t be a right/left issue—it’s a people issue. As advocates, we need to bring as many people as possible on board—no matter what their political leanings are.”
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

September 1, 2024
EU Considering Ban on Tobacco-Free Snus

Image: Andrii
In a tweet from Member of Parliament Charlie Weimers, news of a potential ban on snus in the EU has come to light.
“A secret report I shouldn’t have landed on my desk,” the tweet said. “In the report that will be presented to the EU member states this week, there are two notable writings: (1) praise for how successful the snus ban has been and (2) a recommendation that the EU should extend the snus ban to the tobacco-free white snus (nicotine portions).”
“That the EU snus ban is a success is completely wrong,” he wrote. “It is actually snus that makes Sweden the only country in the EU that is on the way to reaching the U.N.’s goal of a smoke-free society (defined as less than 5 percent smokers), which has saved many lives. A ban on nicotine pouches would have been a hard blow to the attempt to eradicate smoking in the EU.
“Unfortunately, the Swedish exception for tobacco snus does not apply to nicotine pouches. If the EU Commission and the member states accept the report’s recommendation, nicotine pouches will also be banned in Sweden. Men have largely opted out of smoking in favor of snus while women looking for less dangerous alternatives choose nicotine pouches more often. Therefore, such a ban would hit women extra hard.
“The report has been written by consultants who work for DG SANTE (the EU’s health bureaucrats), and the writings probably would not have crept into the report if they did not have the support of the bureaucrats. Most likely, this is a test balloon from the bureaucracy. If the proposal falls to the ground at the meeting with the member states, the bureaucrats can blame the consultants, and if the proposal does not meet resistance, the bureaucrats can interpret it as a clear support and work on with a sharp proposal. This is how you often work in the EU’s bureaucracy.
“The government must therefore already make it clear at the meeting this week that our country opposes a ban on white snus and work to ensure that citizens continue to have the opportunity to choose the least harmful way to use nicotine. Our negotiators are also welcome to raise the issue of the risks to public health of having too many do-gooding bureaucrats in DG SANTE.”
The news has left many angry, with calls for “SWEXIT” if the proposal passes—meaning, those against the measure are calling for Sweden to leave the EU if the ban passes.
October 4, 2023
EU Urged to Embrace THR

Photo: Teo
Ahead of this year’s EU State of the Union address on Sept. 13 in Strasbourg, France, the World Vapers’ Alliance (WVA) urged President Ursula von der Leyen to tackle the devastating impact of smoking-related diseases in the European Union. The association proposes the EU Commission’s president embrace a coherent EU-wide harm reduction strategy that includes evidence-based approaches to vaping and nicotine pouches, which have been shown to significantly reduce harm compared to smoking.
“We implore Ursula von der Leyen to finally address the far-reaching impacts of smoking,” said WVA Director Michael Landl in a statement. “Smoking is a public health problem requiring immediate attention, causing more than 700,000 deaths in the EU annually. Evidence is clear that alternative nicotine products, such as vaping and nicotine pouches, can be a game changer in the battle against smoking. The time for brave leadership is now.”
According to the World Vapers’ Alliance, Sweden has become a bright example that a coherent harm reduction strategy is the key to successfully addressing smoking-related illnesses. Not only is Sweden the first country in the world to reach the smoke-free goal (17 years ahead of the EU targets), but it keeps its commitment to favor harm reduction. Last week, the Swedish government announced its plan to reduce the tax on snus, a smokeless tobacco product similar to modern nicotine pouches, by 20 percent while increasing the tax on cigarettes and smoking tobacco by 9 percent.
Vaping is still a recommended means of quitting for smokers in France, the United Kingdom, Canada and New Zealand, according to the WVA. This April, the U.K. government launched a “Swap-to-Stop” program aimed to incentivize smokers to quit by exchanging their cigarettes for free vape devices. Following Sweden’s recent move to reduce the tax rate on snus based on a risk-based regulatory approach and the U.K.’s full endorsement of vaping as a tool for smoking cessation, the WVA calls on the European Union to follow their lead in adopting a coherent harm reduction strategy.
“In Sweden and the U.K., we’ve seen the incredible impact that a harm reduction approach can have on reducing smoking rates and improving public health. These countries lead by example, using a balanced risk-based strategy that includes vaping and nicotine pouches as safer alternatives to smoking. It’s time for the European Union to follow their lead. President von der Leyen has an unparalleled opportunity to set a new course for the EU in her State of the Union speech—one that embraces innovative, evidence-based solutions to tackle the smoking crisis,” added Landl.
September 13, 2023
A Taxing Issue

The uncertainty surrounding the EU unmanufactured tobacco tax is making it increasingly difficult for logistics companies to operate with a sense of security. Photo: Taco Tuinstra
Freight forwarders struggle with uncertainty as the EU debates whether to tax unmanufactured tobacco.
By George Gay
Erik Van Neuten
Shortly after Erik Van Nueten, a director of Andromeda Tobacco Forwarding and Logistics, joined the Andromeda group in 2006, Tobacco Reporter ran a story on the company’s tobacco division headlined “Outsourcing the hassle.” The heading, which sprang from a comment by Van Nueten, referenced the fact that the company’s tobacco-trader clients could concentrate on what they were good at, buying and selling tobacco, while leaving the rest—the hassle—to Andromeda, the rest being worldwide services such as handling, storage, pest control, transportation, repacking, relabeling, sampling, sample dispatch and the not-inconsiderable associated paperwork.
Unfortunately for Andromeda, and other companies working in tobacco logistics, while the hassle factor in 2006 was challenging enough, it has increased hugely during the past three years, particularly in the EU, where it might be raised to yet another level in the future.
It would be crass to describe the Covid pandemic as having been a hassle, because it was and is a tragedy that has taken the lives of millions of people worldwide, that is still taking lives and that has caused major economic damage that, for most people, has meant many and greater hardships. Nevertheless, looked at purely from the point of view of tobacco logistics, Covid has been a hassle, though one that is fading. During a telephone interview toward the end of January, Van Nueten told me, for instance, that the availability of ships and containers was improving and that shipping rates, while still relatively expensive compared with those being charged two years to three years ago, were coming down slowly to acceptable levels, albeit from the ridiculously high levels ushered in by Covid.
That seems to be the good news. The bad news is that, for various reasons, those shipping rates are unlikely to return to close to where they were.
Taxing Unmanufactured Tobacco
In the EU, in parallel with the Covid pandemic but not connected with it, another issue has been brewing during the past three years and more. Van Nueten told me the European Commission was discussing whether unmanufactured tobacco (UT), which is the main tobacco commodity Andromeda deals with and the only tobacco commodity it deals with in the EU, should be subject to excise tax. No proposal has yet been put forward, nor is it known when this might happen. The commission has been reviewing the EU Tobacco Excise Directive (2011/64/EU) and was scheduled to publish proposals in December. But I was told that publication is unlikely during the first half of this year and that, given any decision would require unanimity among member states, discussions could stretch the time frame for any implementation.
As I understand things, in part at least, the commission wants to include UT within the scope of the excise directive so as to be able to include it also within the scope of its Excise Movement and Control System, which is the computerized system it uses to monitor the movement of excise goods within the EU. I am told that, to achieve such inclusion, the commission needs to create a new fiscal category for UT with a dedicated tax rate. Apparently, the commission could propose a zero percent tax rate for UT, but, even if it did, because the directive provides for only a harmonized minimum level of tobacco taxes throughout member states, individual states could choose to apply higher tax rates.
And it is at this point that these deliberations seem to collide with business reality. The sorts of uncertainties inherent in the current situation, which have already taken root in the EU, mean it is becoming increasingly difficult for Andromeda and other companies working in the field of logistics to operate with a sense of security. Although Van Nueten would prefer to see the traditional system retained with excise applied to tobacco products, he said the logistics industry could, given time, adapt to a new system. What was difficult was the present situation, which was unclear and made transporting tobacco through the EU frustrating and risky.
Although Brussels is still discussing whether to subject unmanufactured tobacco to excise tax, some states have already acted as if such a provision exists.
A Matter of Definition
Although Brussels is still discussing whether to propose the inclusion of UT within the scope of the EU excise directive and thereby allow member states that wished to do so to tax UT, some states have already acted as if such a provision existed. I was told by somebody who didn’t want to be named that, during the past 18 months or so, two trucks containing UT were stolen in separate incidents while in transit within the EU and that the companies that had issued the original customs documents for the tobacco were held liable for import duties, excise and VAT, an amount thought to be in the region of €4.6 million ($4.95 million) per truck. I later learned that these were not altogether isolated cases.
These incidents, which seem quite alarming within a region that is supposed to boast a harmonized tobacco tax regime within a single market, probably have their roots in a 2017 EU Court of Justice case involving Eko-Tabak and Generalni reditelstvi cel (General Directorate of Customs, Czech Republic) in which the court was asked to consider the confiscation of goods belonging to the former, which the latter had ruled to be manufactured tobacco subject to excise duty. The case basically involved the definition of “smoking tobacco” within the EU directive, which the court ruled had to be broad and to take into account whether the tobacco could be smoked after simple processing by means of crushing or hand-cutting.
As a result of this ruling, and despite the fact that the directive applies only to manufactured products, some member states started considering some UT to come within the court’s definition and therefore be subject to excise tax. And clearly, for as long as some states continue to consider UT to be taxable and others don’t, those responsible for transporting tobacco within the EU are going to suffer. Under current arrangements, taxable goods intended for transit need to have special documentation raised by authorized entities in the country of shipment that is then cleared in the country of destination upon arrival. This seems to indicate that if UT were sent from country A, where excise was applied to such a product, to country B, where no such excise was applied, the arrival could not be cleared. And if the tobacco were to be sent in the other direction, no documents could be raised in country B though they would be required in country A.
Probably, I guess, there would be administrative tricks that could get around these problems in the short term, and hopefully they will disappear with the proposals put forward by the commission in revising the excise directive, which will hopefully include those aimed at reinvigorating the concept of a harmonized market, in part by tightening up the definition of UT.
What to Do?
Nevertheless, two major questions seem to arise. What are logistics companies expected to do in the meantime? There have to be some interim arrangements that mean they can operate efficiently, secure in the knowledge that what they are doing is within the rules.
The other question has to address why a system that seems to have been working well should be changed. Well, the answer in some people’s eyes seems to be that the court ruling provided a necessity for change—change that would ensure that member states got their cut, though they don’t put it quite like that. Such change would address the problem caused when UT is stolen during transit through the EU, taken to an illicit factory and ends up as a product in the illegal trade, without taxes having been paid on either the unmanufactured or manufactured tobacco.
In turn, such a way of looking at things raises at least a couple of interesting issues. Firstly, it seems to cast doubt on the idea that the EU, through such initiatives, is pursuing illegal traders at least partly because of health concerns for those who might smoke illicit cigarettes. At its base, the idea is about taxing the tobacco whether or not it gets into the hands of the illegal market; it is about revenue. The other issue is that applying excise to UT could be seen as partly legitimizing the activities of illicit manufacturers. If such a manufacturer steals a truck of UT on which taxes have been paid or are due and turns it into products, those products, I guess, enter the market as excise paid. Even the theft might be disputed by a smart lawyer willing to claim the tobacco fell off the back of a truck.
It seems to me that we are again being driven toward ridiculously complex reactions because of an unwillingness to trace a problem back to its cause—unfair levels of taxes being applied to combustible cigarettes. If the aim is to reduce the illegal trade in cigarettes, significantly reduce the taxes on them and remove laws requiring licit cigarettes to be unappealing while heavily promoting alternative, low-risk products.
*While acknowledging that all opinions and errors in this piece are his, the writer would like to thank the following for their help in explaining some of the background and intricacies associated with the commission’s discussions on tobacco excise: William Meyer, senior EU affairs manager, and Peter van der Mark, secretary general at the European Smoking Tobacco Association.
A Rational Approach: Controlled Atmosphere Systems are Gaining Traction in the Fight Against Tobacco Pests
In the main article accompanying this sidebar, I finish with my usual rant on what I see as the absurd complexities smuggled into efforts to reduce the illegal trade in tobacco products. So, as a way of introducing some balance, in this piece I would like to contrast such efforts with those being used to combat another problem in which rogue players cause economic damage along the tobacco supply chain. It seems to me that the tobacco industry has in recent years approached the issue of tobacco losses to insects in a rational, proportionate and evolving manner.
That’s not to say everything has been fixed. It hasn’t, and new problems could arise in the future, as those who have read the companion piece might suspect. If, as seems possible, excise taxes are applied to unmanufactured tobacco in the EU, there will be an even greater incentive for protecting tobacco. Otherwise, tobacco beetles and moths will not only be eating their way through tobacco but also through the excise paid on that tobacco. And while bureaucrats seem keen on complexity, I think they will draw the line at issuing excise rebates on receipt of evidence provided in the form of well-fed beetles.
Ten years ago, it was said that tobacco worth about $800 million was being lost annually to insects, and so, in an email exchange at the end of January, I asked Rene Luyten, a director of b-Cat, whether the situation had improved or deteriorated since then. He replied that he had no idea about the value of losses but added that he knew that tobacco owners did not sit back and allow problems to overwhelm them. They were always looking to improve the way they protected their tobacco from insects, and that was irrespective of the costs of producing tobacco at any particular time.
One of the improvements that was made saw, in 2011, controlled atmosphere (CA) systems, which had been used in respect of other commodities and various products for 15 years or more, starting to gain traction with tobacco people—those involved in warehousing, shipping, trading and manufacturing tobacco. Further impetus was provided in 2012 when Coresta issued a guideline for the treatment of tobacco beetles with CA, a guideline that was revised to include the tobacco moths the following year. Used properly, CA offers enormous benefits because it kills all tobacco beetles and moths in all their life cycle stages; it can be used for all types and varieties of leaf tobacco without affecting taste and color, and it can be used for tobacco products.
Luyten told me that demand for new CA chambers was currently good around the world, as was demand for extensions of installations made previously by some of the early adopters of this technology. And demand is coming from both large and small companies because installations can be geared to the size of the business. On the modest end of the scale, b-Cat, which has been involved in the CA business for more than 50 years, has installed a system with the dimensions of a single 40-foot container while at the other end of the scale it has built a system with a capacity of 63 40-foot containers spread through nine chambers.
Of course, many leaf tobacco export countries still use chemical insect treatments, mainly because of the high volumes they need to handle and the resulting costs. But because of issues to do with insect resistance to phosphine gas treatments, which became such a huge problem before the adoption of CA systems, manufacturers tend to use CA as the final treatment adjacent to their manufacturing sites. They also tend to favor CA treatments because of issues concerned with the environment and sustainability, issues that drive the part of the continuing R&D effort at b-Cat that is aimed at automating processes so as to minimize energy usage. —G.G.
George Gay is Tobacco Reporter’s European editor, but his territory spans the globe. Based in London, George has covered the tobacco industry since 1982, initially for a U.K.-based publication and since 2004 for Tobacco Reporter. George’s understanding of industry issues, combined with his keen sense of observation and dry wit, have earned him a loyal following among Tobacco Reporter’s readers.

March 1, 2023
‘SHEER Report ‘Fundamentally Flawed’
Vchalup | Dreamstime.com
A scientific report on e-cigarettes prepared for the European Commission is fundamentally flawed, according to the Independent European Vape Alliance (IEVA).
As part of the European Commission’s forthcoming review of the Tobacco Products Directive, the Scientific Committee on Health, Environmental and Emerging Risks (SCHEER) Committee was tasked with producing a scientific review of the health effects of e-cigarettes. On Sept. 23, SHEER adopted its preliminary opinion. The public consultation on the preliminary opinion closed on Oct. 26.
“While we welcome the initiative from the European Commission in taking a view on the science of electronic cigarettes, the draft report it has produced is fundamentally flawed,” IEVA wrote. “What is most striking about the draft scientific review is its failure to compare the risks of electronic cigarette use with the risks of smoking.”
In its response to the preliminary opinion, IEVA cited several areas of concern:
The Committee has concluded that there is insufficient evidence that e-cigarettes are not a useful tool for smokers seeking alternatives, despite quoting two randomized control trials stating precisely the opposite.
In its risk assessment, the Committee has not taken a risk-based approach at all, but rather a hazard-based approach. It states the potential risks of using e-cigarettes without even attempting to compare these with the risks from cigarette smoking, which are exponentially higher.
The Committee has concluded that there is strong evidence that e-cigarettes act as a “gateway” to smoking. However, it has done so based almost exclusively on data from the United States, where an entirely different regulatory regime exists. The Committee also fails to acknowledge that smoking among young people has declined significantly: if vaping leads to smoking, then why are there not more smokers observed during the period where the e-cigarette market grew rapidly?
According to IEVA, the poorly founded conclusions undermine the utility of the report as a document upon which EU decisionmakers can make policy decisions in the best interests of Europeans.
Earlier this week, British American Tobacco voiced similar concerns about the SHEER report.
November 3, 2020
Nicotine Users Surveyed Ahead of TPD Revision

Photo: mohamed Hassan from Pixabay
In the run up to the revision of the European Tobacco Products Directive (TPD), scheduled for 2021, the European Tobacco Harm Reduction Advocates (ETHRA) have launched a major survey to examine nicotine use in Europe.
Among other questions, the poll asks adult consumers about their views on possible regulatory changes. How would users react to increased taxes, flavor bans or to the legalization of snus? Is there a need for greater access to product information? Would lifting the container restriction on e-liquids have any impact? What is missing for people who want to quit smoking?
Available in Danish, Dutch, English, Finnish, French, German, Italian, Portuguese, Spanish and Swedish, the questionnaire will be open until Dec. 31, 2020.
In addition to evaluating the TPD, the European Commission is preparing proposals to amend its Tobacco Excise Directive to harmonize definitions and tax treatment of new products, including vapor, in 2021.
The European Parliament will debate the proposed TPD changes in May 2021.
The ETHRA offers tobacco harm reduction advocates in Europe a platform for exchanging information and sharing experiences.
October 14, 2020
Minting Substitutes

Photo: JTI
Cigarette manufacturers are offering alternatives to smokers left in the cold by the EU menthol ban.
By Stefanie Rossel
As the Covid-19 shutdown left many retailers unable to sell off their noncompliant products ahead of the EU menthol ban, tobacco industry representatives pleaded for an extension of the deadline to no avail: On May 20, article 7 of the Tobacco Product Directive (TPD2) entered into force. Since then, sales of cigarettes with “characterizing” flavors other than tobacco have been prohibited throughout the EU. The ban, which predominantly affects the menthol cigarette category, has ended sales of cigarettes with menthol capsules, click on, click and roll, crushball or dual menthol cigarettes. Vending hand-rolling tobacco with mentholated filters or papers is also illegal if they are supplied together. Exempted from the ban are menthol-flavored e-liquids for vapor products, separately available mentholated smoking accessories, menthol-flavored oral nicotine pouches and cigarillos. Outside of Germany, mentholated consumables for heated tobacco products (HTP) also continue to be legal.
The ban has eliminated an entire class of cigarettes throughout the continent. Although menthol is a far smaller business in the EU than it is in the U.S., where it accounts for roughly one-third of all cigarette sales, its prohibition touches around 8 million adult smokers, according to the most recent Eurobarometer report (from 2017) on attitudes of Europeans toward tobacco and electronic cigarettes. The report finds that menthol cigarette consumption varies significantly throughout the common market, with the products being most popular in Finland (24 percent), Denmark (20 percent) and the U.K. (18 percent) and representing a small proportion of the markets in Slovenia, Cyprus and Greece with 2 percent each. Euromonitor International estimates that the category generates $11 billion in sales in Western Europe.

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A matter of taste
The question is how the millions of menthol smokers will respond when they can’t get their favorite fix anymore. Are they going to quit smoking altogether, as the European Commission hopes? Will they embrace regular cigarettes, resort to mentholated tobacco products that remain legal or switch to reduced-risk products (RRPs)?
“It is still too early to predict what current menthol smokers will do once their preferred products disappear from shelves,” says Femi Namfua, corporate media relations director at Japan Tobacco International (JTI). “The EU gave menthol smokers a six-year transition period to switch to other products. We now have to wait and see how smokers will react. We hope the menthol ban in the EU won’t lead smokers to the illegal trade as this will completely defeat the purpose of the ban—something we warned regulators about during the proposal phase of the new regulation.”
Eric Sensi-Minautier, head of British American Tobacco’s (BAT) EU office, shares this view. “It’s the million-dollar question,” he says. “I believe they will resort to looking for other possibilities available. That’s why it is essential that we are able to offer a greater choice of enjoyable and less risky products.”
Earlier this year, JTI surveyed more than 350 retailers in the U.K., a £11 billion ($13.67 billion) cigarette market of which JTI and Imperial Brands jointly hold an 80 percent share. Data that became available after the 2017 Eurobarometer report suggests that around a quarter of the U.K. market, or $3.42 billion, consists of mentholated cigarettes. Of the surveyed retailers, 25 percent believed that former menthol smokers would remain brand loyal within the ready-made cigarette (RMC) category, 19 percent thought they would switch to roll-your-own tobacco and 45 percent were confident that their customers would switch to vaping or other RRPs. Eleven percent expected previous menthol users to leave the category altogether.

Imperial Brands is enticing former menthol smokers to embrace its vapor products.
Photos: Imperial Brands
Ban sparks innovation
To meet all possible consumer preferences, cigarette manufacturers in recent months have become creative in their efforts to provide former menthol smokers with the widest possible range of products, including RRPs.
“Menthol cigarettes account for a significant portion of the European market, so the removal of these products from shops last month means a number of smokers will be seeking to make alternative product choices,” says Simon Evans, group media and online communications manager at Imperial Brands. “It’s important that we provide a range of options at such a time of significant consumer ‘churn.’ Our Myblu vaping product is available in menthol and other flavored varieties, giving extra impetus for smokers to transition away from cigarettes.”
“But we also understand that many menthol smokers will decide to continue to smoke and so we also focus on providing an evolving portfolio of products in line with their expectations,” says Evans. “Rizla Flavour Cards are flavor-infused sheets of card that can fit inside a pack of cigarettes. When left in the pack for at least an hour, the contents will take on the flavor of the card. Menthol and mint varieties are available. Rizla menthol filter tips are also available for consumers of rolling tobacco.”
Aroma cards have been around from other suppliers for some time, for example from Frizc. For the flavoring of loose tobacco, companies like MacBaren offer ampoules with liquid menthol aroma.
BAT, which is preparing for a future that is likely to be in noncombustible nicotine products (see “Beyond Tobacco,” Tobacco Reporter, May 2020), has been extending its vapor product portfolio to cater to former menthol smokers’ needs. In early May, the company introduced a range of new menthol e-liquid flavors and limited-edition starter kits for its Vype brand in the U.K. “Our strategy is to accompany smokers to move to less risky products,” Sensi-Minautier points out. “The entry into force of the EU menthol ban is a good moment for this.”
According to the company, the new range of e-liquids now closely mirrors the experience of smoking a menthol cigarette, with new blends, an innovative tube filter and new formats across the range. BAT has also innovated its Pall Mall, Vogue and Rothmans brands to offer former menthol smokers attractive, nonmenthol cigarettes.

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Providing more choice
In March, JTI launched several alternative products with new tobacco blends in the U.K. Its New Dual range, which is available in the Sterling, Benson & Hedges and Sovereign brands, provides smokers with new, distinctive tobacco blends, replacing the company’s former menthol capsule cigarettes. The same blend will also be used for the “green” product variants of the Sterling, Benson & Hedges and Berkeley “New Superkings” ranges. As long as their products do not contain menthol, retailers are still allowed to sell cigarettes with names that were previously used to describe a menthol product, such as “green.”
For all those who can’t do without their hint of mint, JTI in early February introduced a cigarette-sized menthol cigar, the Sterling Dual Capsule cigarillo, in the U.K. The product is marketed under the same name as one of JTI’s cigarette brands but is exempt from the ban because it is wrapped in tobacco leaf rather than paper. As its name implies, its filter contains a mentholated capsule, which smokers can click to release a peppermint flavor. Being a cigarillo, it sells at half the price of regular cigarettes.
The company also broadened its RRP portfolio, introducing a variety of new menthol flavors for its Logic e-cigarette brand and its Ploom tobacco vapor products, and outside of RRP, its Nordic Spirit nicotine pouches.
Philip Morris International (PMI) in March added a menthol kit to its IQOS heat-not-burn product comprising an IQOS 2.4 device and two packs of mentholated heat sticks. According to the company, 51 percent of menthol smokers would switch to IQOS when their preferred menthol smoke was no longer available, betterretailing.com reported.
Despite the long transition period—the ban on menthol was announced in 2016, with the introduction of the TPD2—awareness of the new rules remained remarkably low among retailers and consumers alike as the deadline approached. In another JTI survey, carried out one week before the ban took effect, more than half (52 percent) of participating U.K. retailers said they expected adult smokers to remain brand loyal within the RMC category; 31 percent believed their customers would switch to vaping or other reduced-risk products; 11 percent think they will switch to roll-your-own (RYO); and just 6 percent expect adult smokers to quit the category altogether. The results show a significant shift in thinking compared to JTI’s previous survey, with more retailers now believing that their customers will remain brand loyal within the RMC category and fewer assuming smokers will switch to vaping, RYO or quit.
Days before the ban entered into force, another poll, conducted for smokers advocacy group Forest, found that the lack of awareness of the ban also extended to consumers: Almost 40 percent of the more than 2,000 U.K. smokers surveyed were oblivious to the new rules. Only 16 percent believed that the ban would lead to a reduction in smoking prevalence whereas 46 percent of smokers thought that it would lead to an increase in illicit trade.
To educate stakeholders, leading tobacco companies created dedicated websites, which also included information about alternatives to menthol cigarettes and companies’ buyback schemes for unsold menthol cigarettes.

When Rizla Flavour Cards are left in a tobacco product pack for at least an hour, the contents will take on the flavor of the card.
Unwanted side effects
The justification for banning menthol cigarettes is that the minty taste masks the harshness of the inhaled tobacco smoke, which might make it easier for nonsmokers, including young people, to take up smoking.
The tobacco industry has long disputed that line of reasoning. “Peer pressure and parental influence are the main reasons for starting to smoke, according to studies, not menthol cigarettes,” says Namfua. “Study results do not support the claim that menthol smokers start smoking at a younger age. There is no sufficient evidence to support the claim that a prohibition of menthol tobacco products will affect smoking rates as campaigners suggest. Such a ban is therefore an unjustified restriction on adult consumer choice and sets a dangerous precedent for other products beyond the tobacco category.”
“Young people don’t start smoking because of menthol,” echoes Sensi-Minautier. “We do not believe the available science supports the idea that a menthol ban will reduce youth smoking or address the health impact of smoking more generally. Personally, I don’t believe that it will have more of an impact on smoking rates than plain packaging, which has had no effect.”
Canada, which prohibited menthol cigarettes in October 2017, provides a cautionary tale. Several of the country’s provinces already had menthol bans in place at the time of the nationwide rule. A study published this February by the National Bureau of Economic Research found that the provincial menthol bans simply increased nonmenthol cigarette smoking among youths, leaving overall youth smoking rates unchanged.
While the menthol ban may not achieve the desired reduction in EU youth smoking, it may very well bring about unintended consequences. “We now have to wait and see how smokers will react, but based on previous bans, what we often see is a coinciding increase in illegal trade and a decrease in tax revenues,” Namfua points out. “Government revenues are jeopardized in case of a ban in any market with mentholated tobacco products, especially in places where a large part of existing smokers choose them, like Poland, for example, as they may look to illegal channels to buy their preferred flavors in [the] future. U.S. law enforcement agencies are publicly opposing a menthol ban due to worries of an increase in organized crime, which remains an important concern.”
If smokers of mentholated cigarettes switch to illegal channels, the impact on government revenues would be substantial. “Studies show that up to 25 percent of menthol smokers would buy cigarettes from the illegal market instead, meaning governments would lose millions,” says Namfua.
In Europe, he says, criminal gangs started taking advantage of the menthol ban even before it was implemented. U.K. law enforcement agencies began finding packs of counterfeit menthol cigarettes as early as October 2019—seven months before the ban.
“Any prohibition of a product may be a driver of illicit trade, but the situation might be more complex,” cautions Sensi-Minautier. “We need to be careful because we don’t know yet if current consumers of menthol cigarettes will consider menthol to be so important to them that they find an illicit source. It would also be interesting to see whether the criminal gangs will seize this opportunity to diversify.”

JTI has broadened its RRP portfolio, introducing a variety of new menthol flavors for its Logic e-cigarette brand and its Ploom tobacco vapor products, and outside of RRP, its Nordic Spirit nicotine pouches.
Stefanie Rossel is Tobacco Reporter’s editorial contributor. An experienced trade journalist, she combines sharp reporting skills with in-depth knowledge of the tobacco and vapor industries. Prior to joining Tobacco Reporter, Stefanie was editor-in-chief at Tobacco Journal International, where she worked for a decade. Fluent in English, German and French, Stefanie covers tobacco news around the world. She is based in Germany.

June 1, 2020
EU Push to Tax Novel Products Like Tobacco

Photo: Horst Winkler from Pixabay
EU member states will ask the European Commission this week to place electronic cigarettes, heated tobacco products and other novel tobacco products under the EU Tobacco Excise Directive, meaning these products would be taxed just like traditional tobacco products, according to a report by Euractiv.
Although novel tobacco products are regulated under the Tobacco Product Directive from a health perspective, there is currently no EU-wide excise framework.
Some member states tax e-liquids and heated tobacco products at different rates while others do not tax them at all.
In January 2018, the European Commission refrained from proposing harmonized taxation for novel tobacco products, citing a lack of data.
However, in February 2020, the executive published a report expressing concern about the lack of harmonization’s impact on the functioning of the EU internal market.
“The current lack of harmonization of the tax regulatory framework for these products is also restricting the possibility to monitor their market development and control their movements,” the report stated.
The tobacco industry argues that novel tobacco products and electronic cigarettes have significantly reduced health risks compared to traditional smoking and should therefore be taxed at lower levels.
May 27, 2020
Firms Offer Alternatives After Menthol Ban

Photo: Imperial Brands
Tobacco companies are taking advantage of the U.K.’s ban on menthol cigarettes to promote alternative products, according to the Bureau of Investigative Journalism.
Philip Morris reportedly described the ban, which began on May 20, as a “huge opportunity” for its business as the 1.3 million menthol smokers in the U.K. consider their options.
According to the bureau, Philip Morris in the runup to the ban hired sales reps to promote its menthol heated tobacco products directly to newsagents, one of the only legal ways it can advertise in the U.K. where almost all tobacco advertising is banned. It also offered promotional menthol kits and trials for new customers, with half-price tobacco sticks in any of its four menthol flavors.
Philip Morris’ competitors have also tried to turn the menthol ban into a sales opportunity. Japan Tobacco has launched a menthol cigarillo, Imperial Brands has designed a mint-infused card that flavors cigarettes with menthol, and British American Tobacco is marketing its mint-flavored vapes.

“The menthol ban is going to be bad news for a lot of smokers, who are going to find smoking less appealing, so it is a big opportunity for smokers to quit,” said John Britton, professor of epidemiology and director at the U.K. Centre for Tobacco & Alcohol Studies at the University of Nottingham.
He said that tobacco companies will “want to minimize the numbers who quit and maximize the numbers who continue to buy products from them.”
May 26, 2020